tv Real Money With Ali Velshi Al Jazeera January 4, 2015 5:00pm-5:31pm EST
look at this shocking crime >> the major difficulty for the prosecution that there was no evidence >> al jazeera america presents lockerbie part three: what really happened? after a 6-year struggle to pull out of the resecs america sets the -- recession, america sets the tone - who wins and who losses in 2016 vladimir putin's russia kicks off the new year engaged in a new cold war with the west. we look at russia's shaky economy, and falling oil prices are a part of the sto ag north korea for the cyber attack on sony. whether it make a difference.
i'm patricia sabga in for ali velshi, and this is "real money". divergence - expect to hear that a lot this year as changing fortunes mark out the winners and losers in the global economy. for the first time since the recession, the united states is the engine - not china, not emerging markets. the u.s. economy is expected to grow 3.1%. the labour market is picking up steam. we have seen a small but significant rise to u.s. wages. meanwhile - china's growth story is not such a growth turner with many expecting the economy to grow 7%. it's a lot higher than the u.s. it is a far cry from the double digit growth china has seen in
recent years, and the european union - well it's plain stagnating. 1.8% economic growth is forecast for the e.u. in response the european central bank chief said he's ready to spend loads of cash to simulate e.u. economies, sending the dollar soaring to the highest level in five years, and the dollar strengthening against other economies. a 50% drop in oil is to blame. the price drop is making losers out of the oil-producing regions, from russia to iran texas to north dakota. the stronger dollar will make losers out of the u.s. exporters if the products are more expensive to buy. the slow down will hurt american manufacturers, it will not be enough to kill the momentum of
the global economy. jay joins us from the company's officers in charlotte, north carolina. great to have you back on the show. let's start with the focus on the u.s. is the boom from spending - will that offset weaknesses we may see as a result of the strong dollar? >> it should. keep in mind that consumer spending is two-thirds of the u.s. economy. exports is 10%. if consumer spending grows a little given the size of the spending it will offset the drag. >> what is your outlook for china this year? >> well in 2014 is grew around 7.5%. as you look into 2016, slower -
6.5%. that is slow by chinese standards of the last few decades. 6-7% growth is not all that bad. >> how do you see that rippling out through the global economy? >> well you know if you look at china's main trading partners slower growth will affect the economies. when you add everything up, and look at how big the united states is relative to china, and the effect it has on the global economy, the best way to measure is to show that china is 50% of the size. a slower china certainly is not good for the global economy, as long as they don't implode, which we don't think it will happen the overall economy should be okay in 2015. let's put the focus on europe. we have got low inflation and
some european countries in the grip of other faces. can they escape this? >> it will be slow. if you think of our economy, and the stimulus that the federal reserve implemented in the united states. five years of slow growth and low inflation. europe is starting to get along with this. it will be a while before europe starts to pick up steam. >> do you think a quantitative easing programme in egypt will boost the price points or do you think they are in for another year, two years three years of pain. what is your outlook. >> two or three years - i don't know if it's pain but two or three years of slow growth. can't tative easing on -- quantitative easing on the margin helps. because the e.c.b. buys government bonds, that's an
expectation. it doesn't mean that europe will roar ahead. we are looking at a slow europe in the next few years. it's a global economy. you expect the u.s. to be insulated from the headwinds. why is that? >> if you look at the overall u.s. economy and think about it what is it it's a service-based economy. services are not traded all that much. you think of the bigger sectors of the economy, starting with health care. how much is that affected by growth? >> zero. education, how much is that affected by growth. zero. little. if you look at the big sectors, they have a lot of ties with the rest of the world. a real significant slowdown or downturn in the rest of the world will hurt. if all we talk about is slower global growth it doesn't cause the economy to go back into
recession. >> this is the question that is so important. that is wages. we see an uptick in the last employment report. do you think this could be the year when u.s. workers see a meaningful increase in their paychecks? >> i think potentially it could. what is really important is not necessarily what you see in the pay check, it's purchasing power. what we believe we'll see is acceleration in nom nam wages, but in -- nominal wages, but inflation should be low. look at gasoline prices down 40-50% putting extra purchasing power in people's pockets. at the end of the day, that's important. we believe that purchasing power will be stronger in 2015 than last year. >> here is hoping that that comes true. thank you for joining us.
falling oil price assist a reason russia is entering 2015 on shaky economic footing. the annual inflation skyrocketed, prompting the central bank to hike key interest rates to a growth chilling 17%. to put it into perspective, at the beginning of march it stood at 5.5%. imagine seeing your mortgage rate double in a year. the loss of confidence triggered a wave of flight from russia. some companies are running into
company servicing russia's corporate debt shooting up to $550 billion in 2014. that gives the kremlin little room to manoeuvre as we were sanctions bite. especially those blocking firstly tied to russian president vladimir putin's regime from refinancing debt denominated in dollars. the kremlin is bailing out banks and engineered to what amounts to a bail out of rosneft. russia has a healthy reserve, but when you break it down it may not be as robust as it appears. >> reporter: 388.5 billion in foreign reserves a curbon that is hand to see russia through its harshest economic climate since the debt default. how long can it hold out. >> you can run the maths, with all of them it doesn't last forever. >> russia has taken a $120
billion bite out of the reference, blowing the lion's share on defending the rouble. not all of the $388 billion is easily tapped. 45 are held in goal. another 12 billion is tied up with the i.m.f. mostly in noncash instruments. russia counts 170 billion as reserves including a fund meant to cover short falls. >> it's not sure how liquid the funds are. >> dedoubt the liquid its and russia's position doesn't look nearly as plump. >> oil could fall further, and
firms can't refinance tens of millions coming due. >> our next guest believes russia is heading towards a crisis and few people truly appreciate other country's economic woes how it would place so many elements of the rule under strain. we speak to the professor of global affairs. thank you for joining us. let's start with vladimir putin's grip on power. how is it going into the year? >> it's pretty much unchallenged. there's no real opposition movement or candidates in power. it's brutal. there's no ways of bleeding - you are for or against vladimir putin. as pressure rices people will be
thinking is vladimir putin the by they want. we are seeing 2015 was going to be a duff year and everything comes down to the economy. he dispenses bailouts and the opportunity to embezzle for massive value. as it shlinks, everyone competes. with vladimir putin, up to the point times have been good so he can by everyone off. that's when people mr think "last year you were my protector, now you are not. what else do i do? >> let's talk about the decisions. so many aspect resting on making it great again.
will he cut social spending. where is he likely to cut first in the view. he's already trying to cut. most will swallow a 10% cut. the interesting thing is not the military security or the police. therefore we are beginning to see the tough decisions. the cut in infrastructure and health education and so forth will not have an incident effect. over the cores of the year people will start to notice that. even in the military they'll have to make tough decisions, there's talk about a strategic bomb programme that may need to be pushed back. at the moment it's clear he is prioritizing guns not butter it beginning to come under pressure. it says something to the extent that they realise tough times are coming.
>> when we look at the rainy day fund it can't last forever, but gives vladimir putin a bit of a squeeze. when will it feel tight? >> when the current cuts are noticed on the streets. yes he can bolster the ruble. it has little impact. the ruble matters when they want to book when they package a holiday in egypt or need a spare car. >> it's interesting you mentioned the packaged holiday in egypt. we hear about a stoic russian ability to weather the hard times. do you think it's overblown a little? >> i think it's overblown. without trying to undermine the heroism, in part they were heroic because it was a choice of being a hero or have someone
put a bullet in the back of your head. the second thing is russia has 20 years of pain then gains. they have lived better than others and have gotten used to it. this is why vladimir putin is popular. not because of great glories, but when they experienced and enjoyed consumerism. this is why they'll notice it and resent it. vladimir putin said "you stay out of politics vote the way you are meant to vote. let us run things and your life will get better and continue to get better. now it will not. that's when they'll notice that." >> watch this space. i could talk for hours about that. thank you for joining us appreciate it the u.s. is lobbying sanctions at north korea, something as the first aspect of
president obama is striking bag at north korea over allegations that the communist regime was behind devastating cyber attacks, and ordered the treasury to tighten sanctions that has been in place half a century, it signals out officials and three organizations, cutting them off from u.s. financial systems. u.s. trades with north korea. $22 million in 2014 most in u.s. food exports. the white house defended the actions in a statement saying
"we take seriously the attack aiming to take financial effect on a u.s. company and affect artists and individuals with the goal of restricting their rite to free expression." >> sony was not immune to a data breach nor where its employees, leaving many wondering how to safeguard their information. darren gauci owny is c.e.o. of personal security, specialising in preserving information online. let's start with industries. sony was the victim of a rich sous hack. what else do you think may be targeted. >> merchandising like store comers. >> want other areas. some mention health care as data goes online.
to you think it is at rick. >> anything online is at risk. anything with a connection with the internet is at risk. >> what threats do you think are looming on the cyber security horizon, that countries have to be protlent if about. >> -- proactive about. >> the important thing to know is hackers are well financed supported and pervasive. it's not specific to one country or the other. everyone the united states and abroad. it's important to practice strong security protocols and controls whether you are a company and/or a consumer and with consumer it starts as simple as using a password manager for managing all the passwords for sites everything from ian loin managing as well
as using a vault, for all of your personal files, photos and videos. >> how can consumers know that the vault is secure. it lives in the cloud. can it be hacked. >> if you use a security censored product, what is the key phrase zero nalo security. that means we or the public does not have access to the password or key that is used to encrypt or decrypt. if the hacker is in north korea, if they retrieved the file they'd not be able to open it because it's encrypted. >> almost every consumer has a smartphone how do they protect the smartphone especially when you read reports of people
hacking into the camera and getting it by reading the reflection in your eye. >> we use biometric authent sayings which reads the -- authent indication which reads the fingerprint. it would be difficult for a hacker to gain access to the information. the important thing is the encryption key is located on the device itself. in order for a hacker to gain that. they'd need the device. the hack is in a different country, it's virtually knock to penetrate the vault. >> thank you for joining us. thank you. last week an egyptian court overturned cases against three of our al jazeera colleagues imprisoned in egypt and ordered a retrial. they have spent more than a year in detention over charges of
supporting terrorists. two of our colleagues mohamed fadel fahmy, and peter greste are petitioning shap egyptian authorities, based on a degrease to allow prisoners to be deported. >> it acknowledges that the first trial was flawed. >> reporter: from australia, the brother of gaoled al jazeera journalist peter greste reacting to news of a retrial. in egypt the family says it's not good enough. >> i was expecting every trial. with that i expect a release. >> it's hard to see a loved one in prison behind bars for doing their job. >> the journalist peter greste egyptian mohamed fadel fahmy, and baher mohamed have been behind bars for 370 days. an egyptian court convicted them of spreading news and supporting
the outlawed muslim brotherhood. al jazeera called it absurd and demanded their release. the greste family is hoping the egypt president will use powers to set people free. >> the president caught numerous comments that he wished they'd been deported if he was in power. we are confident we may see some action. >> pressure is mounting against the egyptian government of the the u.s. and u.k. is calling for the journalists to be freed. press freedom organizations are reacting to the retrial. >> we'd like to see the journalists freed. at the same we see the retrial as an opportunity for the court, the judicialal system to recognise that we are incident. >> on the website amnesty international took it further by
saying the men should never have been gaoled in the first place and not spend an extra day in prison and: the greste family agrees and will push for justice. >> we believe that peter is an innocent man, and we will not give up until justice is served. until his release. >> if peter greste's deportation application fails, his brother says the lawyer will apply for bail. baher mohamed is not entitled to apply to be deported from egypt. he has no option but to go ahead with a new trial, which is expected to start within the nest month. peter greste, mohamed fadel fahmy and baher mohamed have paid a heavy price for their work as journalists, and in egypt's charged political environment that is judged a threat by the military dominated government. since july 2013 an estimated six journalists have been
killed, doze ens detained. most were -- dozens detained. most were released. but authorities contain 11 journalist including our three colleagues. meanwhile egyptian authorities admit to detaining 10,000 political opponents in 2014. despite their poor human rights efforts the u.s. government continues to give the military financial support. ali velshi has this report. >> reporter: the united states gives up to $1.5 billion a year in aid to the egyptian government. $1.3 billion going strait to the egyptian military. president obama temporarily suspended the military portion of that aid. in yule 2013. that's when the egyptian military removed mohamed mursi, the first democratically elected president. since then the government cracked down on dissent, making
moves to silence the press inside egypt. in dises 2013, egyptian authorities gaoled three al jazeera journalists, peter greste and two producers, mohamed fadel fahmy, and baher mohamed who also holds canadian citizenship. six months later u.s. secretary of state john kerry met with the president, abdul fatah al-sisi, and protested the journalists detention. during the talks john kerry offered to release u.s. aid. >> i have emphasised our strong support for upholding the universal rights and freedoms of all egyptians, including freedom of expression. >> reporter: that did little to help the al jazeera journalist of the the next day all three were convicted of helping terrorists and reporting false news. they maintained their innocence.
despite the deterioration of human rights the obama administration released $570 million of aid, and 10 apache helicopters to the military. >> in december the u.s. congress inserted language into the 2015 spending build making egypt's aid contint on progress made. crucially, it gives the u.s. secretary of state discretion to wave the conditions if doing so is deemed to be in the national interest. >> we welcome the flexibility to further the strategic relationship with egypt. there has been no policy decision with regards to our programme. our concerns about the human rights record has not changed. many critics content that the